The Challenge of Construction Labor Shortages
Construction firms have long struggled to maintain an adequate work force, but COVID and underlying demographic trends have combined to intensify the problem. The workforce continues to age, so there’s a diminishing percentage of people willing and able to handle the demands of the job. Other complicating considerations are the federal unemployment benefits that have incentivized not returning to work, as well as the industry’s spotty record of providing health benefits. In July, the Bureau of Labor Statistics reported some 300,000 unfilled positions in the construction industry.
These factors tell us the lack of housing inventory is not going away any time soon. Buyer demand continues to expand, and home builders increasingly find themselves unable to meet that demand. It’s no surprise that home construction startups declined by 7% nationwide. Add to this mix rising material costs and the supply-chain disruptions caused or intensified by the ongoing pandemic.
The latest statistics from the Charlotte area real estate market reflect these trends. As of August 31, the number of homes on the Charlotte area market was 4,069, a decrease of 2,518, or 38.2%, from August, 2020. The number of days on market until sale has dropped once again, this month to 14 days, a 58.8% drop-off from last year. And once again, these indicators of a hot seller’s market are confirmed by the leading price statistics. For example, the percent of original price received has climbed once again, this time by 3% to 101.5%. The median sales price rose by $41,575, an increase of 14.3% from last year.
However, people continue to relocate to Charlotte, thanks to the healthy growth of the local economy. And rather than renting, motivated buyers are finding homes: new listings grew in the greater Charlotte region by 5.3% to 5,996, and pending sales increased by 6.9% to 5,902.
So yes, there’s reason to hope!
These are the overall numbers for the greater Charlotte Metro area. For more detail, see the reports for Charlotte, Matthews, and Huntersville.